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What To Do If Your Employer Drops Spousal Coverage?

Health Care Reform ChangesAlthough not required by law, many employer-sponsored health plans might offer spousal or dependent coverage as an added benefit to workers. However, due to the anticipated rising health insurance costs, several companies have announced they are dropping spousal coverage for employees. A survey by global professional services company Towers Watson reports that, “while surcharges for spousal coverage are more common, next year, 12% of employers plan to exclude spouses, up from 4% this year.”

The United Parcel Service (UPS), perhaps one of the most notable of these companies, plans to remove thousands of spouses from its health plan, citing that rising medical costs combined with the costs associated with the Affordable Care Act (ACA) have made it more difficult to continue providing the same level of health care benefits to employees at an affordable cost.

Not to fret! If you or your spouse has been kicked off an employer’s health insurance plan, there are other options. Start by talking to your employer to find out some important information:

  • When is the next employer open enrollment period?
  • Are they dropping spousal and dependent coverage?
  • Or, will there be any changes in rates for spousal or dependent benefits?

If your employer is indeed dropping spousal coverage or changing rates, find out when that coverage ends. The next option for you or your spouse is to sign up for individual health coverage when individual open enrollment begins on October 1st, 2013. During open enrollment, individuals can shop for and compare health plans from multiple providers in the new health exchanges or marketplaces.

It’s important to be prepared in case your employer does decide to cut spousal coverage, as the ACA mandates that most individuals purchase health insurance or pay a fine. This individual mandate takes effect in 2014.

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